European wheat prices fell on Friday after the US Department of Agriculture (USDA) raised its forecast for global wheat production in 2016/17. September milling wheat on the Paris-based Euronext exchange ended 2.50 euros lower at 168.50 euros a tonne.
Prices rose earlier in the week on spillover support from rising corn and soybean markets and set a four-month high of 174.00 euros on Monday. "The report was pretty bearish for wheat. There were some bullish world numbers for soybeans and US estimates for corn, but nothing much for wheat," one Euronext dealer said.
In its monthly report, the USDA raised its forecast for global wheat production in 2016/17 to 730.8 million tonnes which would be the second highest on record. The rise partly reflected an upward revision to EU wheat production to 157.5 million tonnes, up one million from the prior month's forecast.
"The EU production increase is entirely for Spain and reflects favourable growing conditions as confirmed with satellite imagery data," the USDA said. "The production forecast for France is unchanged despite heavy rain for the month of May." Feed wheat futures in London also fell although gains were restricted by the weakness of sterling with November down 0.90 pounds at 122.60 pounds a tonne.
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